The current payout rate is 19.53%, so nets to 17% after paying for insurance to a 3rd party.

The accounting is transparent and on the Terra blockchain so it certainly isn’t a Ponzi scheme. However the payout rate is not guaranteed or constant and does fluctuate from time to time. The UST/Anchor Protocol payout is likely not sustainable and should come down overtime. That said the Terra Foundation recently put an additional billion dollars into the incentive pool so the rates should continue for at least another year.

I would never advocate putting money into anything without investigating the risks for oneself. That said, even money in the bank isn’t always safe as savers in Cyprus learned the hard way after the GFC when their government decided the banks needed a bailout more than depositors needed their savings.

I took a look at Nexus mutual - where do they claim they'll pay out 17% guaranteed if the investment fails? It looks like it requires a loss of at least 20% of the cover amount to make a claim, and that's due to either a network failure or a theft of some sort.

They claim they payout if the stablecoin:USD peg is broken by x% for more then y days OR if the smart contracts are expoited in unintended ways (read hacked) The other insurance products provide similar payout policies.

The Anchor Protocol offers the accrual of UST at a specified rate (currently 19.53%) but just like your bank does not guarantee the interest rate paid in savings deposits for any fixed period of time, the payout rates on Anchor and other similar protocols can and does vary over time, though Anchor Protocol has paid just shy of 20% APY for over a year and the fund has been backstopped with an extra billion dollars so should be stable for at least another year.

Notably due to the mechanics of the Terra blockchain recording these transaction, you deposited UST balance (which is protected by insurance if purchased) is updated every 6 seconds.

Therefore, while the payout rate varies (like a bank) and is not guaranteed over time (like a bank), you can move your funds if it ever drops below an acceptable level for you and you would only be out the interest on a few seconds to a day - depending on how closely you watch it.

Since this is all on-chain via smart contracts it is transparent to monitor or move programmatically for the paranoid.